Los Angeles is a unique market, whether we are talking about the way you buy and sell property or rent it out. When it comes to investing, you have a wide geographical area to work with. People are looking for rental homes all over the city and also in the outlying suburbs. There’s a diversity of property types, too. You can buy a single-family home in an older, established neighborhood or a new construction condo in a gated community. There are multi-family buildings, apartment buildings, and townhouses.
All of this to say, choosing the property you ultimately invest in takes some strategy and creative thinking. It starts with your investment goals, of course, and what you’re hoping to accomplish when you acquire residential real estate. At Bell Properties we can tell you that beneath the surface of this large, expensive, and diverse city lies a treasure trove of hidden rental markets waiting to be uncovered by forward-thinking real estate investors.
Is that you?
While the usual hotspots in Los Angeles are well-known, and there are far more trendy neighborhoods than we can even count, there are also several less talked about neighborhoods offering lucrative opportunities for those willing to dig a little deeper into the opportunities available here. Let's explore some of these hidden gems and the potential they hold for astute investors.
Investing in Los Angeles Rental Properties
Los Angeles is attractive to renters, with its diverse culture, strong local economy driven by multiple industries including entertainment, and year-round pleasant weather. You won’t have to worry about vacancies. You might be hearing about people leaving California and moving out of expensive west coast cities like ours. Rental values have, finally, stabilized this year. Those things have not harmed the rental market here too much, and you’ll find there is still a large pool of tenants and rents that are high enough to secure ongoing income in the short-term and remarkable appreciation over the long term.
Real estate in Los Angeles is always going to be valuable.
The tenant base is as diverse as the properties and neighborhoods that are found here. From young professionals settling in to tenants with growing families as well as students and new residents who have recently moved to the west coast, the demand for rental properties remains consistently high.
Investing in Los Angeles rental properties can yield significant returns.
But, you have to know where to look.
Understanding the Importance of Location
When it comes to real estate, the adage "location, location, location" has been said a thousand times, and you’re probably sick of hearing it. But, it’s as relevant as ever. And you know why location is so important. Let’s consider:
Property Value Appreciation
Properties in desirable locations will almost always appreciate faster than those in remote, heavily commercial, or less sought-after areas. A well-located property will not only hold its value but is also likely to increase in value over time, providing a significant return on investment. Neighborhoods shift and demand does, too. Locations will evolve, so it’s important to recognize both the strengths and the challenges of a given area.
Rental Demand
A property in a prime location is more likely to attract tenants, ensuring a steady rental income. Proximity to amenities like schools, workplaces, healthcare facilities, and entertainment options can make a property more attractive to potential renters. This drives up your rents.
Quality of Life
The overall quality of life in a neighborhood can significantly impact the attractiveness of a property. Safety, cleanliness, community vibe, and access to green spaces are all factors that potential buyers and renters consider when choosing a place to live.
Prioritizing Location as Investment Decisions are Made
When you’re establishing your investment goals and considering where and how you should invest, it’s always important to prioritize location. Experienced investors know this, and if you’re new to real estate or thinking about buying your first property, make sure you understand how much location can increase or diminish your earnings.
Look for properties in neighborhoods that are either already popular or are up-and-coming. Research local crime rates, school quality, and community services. Websites like Zillow or Redfin can provide valuable data and insights into various neighborhoods, but you want to access reliable data that’s more urgent and up-to-date. Talk to a Los Angeles property manager. We’re always looking at neighborhood insights at Bell Properties.
Check out economic stability, too. A location with a stable or growing economy offers better job prospects, which translates to a more stable rental market. Consider areas with low unemployment rates and a diverse range of industries. Accessibility is also a major factor in determining a property's desirability. Properties close to public transportation, major highways, and airports tend to be more attractive to both buyers and renters.
Areas slated for future development often offer great investment opportunities. Upcoming projects like new shopping centers, parks, and public transit lines can significantly boost property values in an area where you’re planning to rent out a home.
Emerging Los Angeles Neighborhoods
If you’re wondering about where the emerging neighborhoods are in Los Angeles, Bell Properties has some spots to share with you.
Highland Park
Once overshadowed by its more famous neighbors, Highland Park is now fast becoming a sought-after locale for renters. With its eclectic mix of historic homes and modern amenities, this neighborhood is attracting an exciting mix of artists, professionals and remote workers, and families looking for good schools. The median home prices are still relatively affordable, comparatively, making it an attractive option for investors looking to get in early before prices soar.
Silver Lake
Some might argue that Silver Lake is hardly emerging since it’s known for its trendy vibe and vibrant community, but we are constantly surprised by Silver Lake and the way this neighborhood has performed. Really, it has been flying under the radar compared to places like Downtown LA or Hollywood. With its scenic views, artisanal shops, and coffee houses, it’s a haven for creative types and renters in all demographics. The rental market here is robust, with high demand ensuring low vacancy rates.
Koreatown
Koreatown, or K-town as locals call it, is another neighborhood that offers immense potential. Rich in culture and nightlife, it’s become a favorite among the younger crowd of renters. The area has a variety of rental options from luxury apartments to more budget-friendly units. Its central location and public transport links make it appealing to a wide demographic.
Echo Park
Echo Park blends old-world charm with modern conveniences, making it a desirable spot in the rental market that not a lot of investors have discovered yet. The neighborhood's proximity to downtown Los Angeles, coupled with its scenic lake and park, makes it a desirable place to live. Investors can find a mix of older but renovated homes and newer developments, speaking to diverse renter needs.
West Adams
West Adams is quietly making a name for itself. This historic neighborhood, known for its well-preserved architecture, is witnessing a renaissance. With new eateries, art galleries, and community spaces popping up, it’s attracting a wave of new residents. The relatively lower property prices and steady rental demand make it an attractive option for investors.
Why Invest in Hidden Markets?
Every investor will have a prioritized list of things they’re looking for when they buy. We like the idea of hidden and emerging markets for several reasons. First, they offer higher ROI potential. Investing in emerging neighborhoods often means purchasing properties at a lower cost compared to more popular areas. As these neighborhoods develop and grow in popularity, property values and rental rates tend to increase, leading to higher returns on investment.
There’s also less competition, which can be a relief in an investment space like Los Angeles. Hidden markets typically attract less competition from other investors, allowing you more opportunities to negotiate better deals on properties.
Finally, adding properties from different neighborhoods to your portfolio can help mitigate risks. If one market experiences a downturn, others might remain stable or even flourish, ensuring a more balanced investment strategy.
Tips for Investing in Hidden Rental Markets
There’s a way to invest in hidden rental markets successfully. Here’s what Bell Properties recommends, as your local Los Angeles property management resource.
Conduct Thorough Research. Use local market data, and consult with real estate agents and management experts familiar with the area to understand the potential and risks associated with each neighborhood.
Monitor Development Plans. Keep an eye on future development projects and city planning initiatives that could impact property values and rental demand. A new theater is great for your neighborhood. A new highway? Not so much.
Network with Other Investors. Join real estate investment groups and forums to share experiences and gather recommendations on promising markets.
Discovering the hidden rental markets of Los Angeles can be a rewarding venture for investors looking for creative ways to approach this real estate market. By focusing on emerging neighborhoods like Highland Park, Silver Lake, Koreatown, Echo Park, and West Adams, you can tap into investments with significant growth potential.
If you’re ready to explore these markets, or others Iike them, we’re ready to help. Please contact us at Bell Properties, and we’ll talk about what you can expect when you rent out property in Los Angeles.
